RED (Reliable Excavation Demolition), a subsidiary of TF Industries, allegedly specializes in "demolition operations". In reality, from behind a myriad of sub-fronts, it secretly controls half of the world's governments, led by founder and CEO Redmond Mann. Beneath the convincing exterior of their bases of operations can be found computer racks, satellites, rockets, and missile installations.

The other half of the world is just as secretly controlled by their rivals, BLU (Builders League United). Each corporation administers its half of the world with a multi-disciplined army of paper pushers. For any problem lacking an obvious bureaucratic solution, mercenaries are contracted to address the situation through a massive application of force. Conflicts between the two companies began as land disputes between their leaders, and have continued for about a century to the present day.

RED and BLU share an intense rivalry, with nearly all encounters between the two quickly escalating into brutal and often fatal violence. Inter-company friendship is also strictly forbidden by contract. Despite this, the RED Demoman and the BLU Soldier at one time became fast friends after meeting each other at a projectile weapons expo. Once this was brought to the attention of the Administrator, however, she pitted them against each other in a deadly competition that promised a mysterious new item to the winner, twisting their former friendship into a bloody war.

RED favors a more rustic style of architecture than BLU. RED's dress code, however, is rather liberal, requiring that employees adopt a red motif for easy identification. This could also be for identification by Sentry Guns.